Trying to make sense of it all…
2022 was another banner year for real estate. Most areas in Bucks County saw double digit price gains with the counties overall increase in median sold price up 9% to $430,000.
Interest rates started out in the low 3’s in January of 2022 and by December they were just over 6%. The fact that a doubling of rates didn’t slow sales, shows how much pent up demand we have from the last two years.
Compounding with demand, we have seen a DROP of over 30% in inventory (homes for sale) since 2018. People aren’t selling and builders can’t afford to build.
I may have mentioned once or twice (or 100 times!) that until we get our inventory levels back, it’s going to be hard for the market to balance.
My recommendation to sellers on pricing right now is to be at or slightly below market value based on your homes condition. Look at the listing price of sold comparables, NOT the over inflated sales price that resulted from bidding wars. Price it right and be the home in the nicest condition with the best upgrades. You will have no problem selling and it increases your chances at better terms – no inspections, over asking price, etc.
2023 could be a never-before-seen storm of economic…well, mess! On the plus side for buyers, recessions typically trigger lower interest rates. And for sellers, it’s still going to take time to get inventory levels up, so it will remain a sellers market for the foreseeable future.
It may take a year (or a few) for inventory and rates to balance back out again, but I believe it will happen. These storms don’t last forever.
In fact, when home prices start to come back down it is better for those looking to sell their smaller home and ‘move up’ to a larger home. You will see more savings on the purchase price of the larger home than you will see loss in value of your smaller home.
If you plan to sell or buy in the near future, call me now. I can give you the strategies and suggestions to help make it as easy of a process as possible.
For now, I wish you the happiest of New Years.
If you or a friend want to sell their house, I will drop what I’m doing and run over to meet you! Ha! Seriously, I’m here if I can ever be of any help. Never hesitate to reach out.
